Leni Cummins discusses self-dealing sponsor issues in a special issue of Habitat magazine, titled “Seeking Counsel,” which profiles top condo and co-op attorneys. Leni provides insight into issues that arise when a condo board takes over the responsibilities of the building from sponsors only to discover irregularities in how the building was being run. Leni shares one situation where she discovered that the building was running at a deficit. After accessing financial and reviewing the governing documents, she determined that the sponsor-controlled board had skewed expenses to the residential unit owners and away from the commercial ones, which were still under control of the sponsor. In order to avoid these types of complications, she emphasizes the importance of looking at the finances before taking control of a board.
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